The WWD Composite Stock Index rebounded from last week’s yearly low, rising 2.9 percent to 1,042.45 from 1,013.12 a week ago as several key retailers posted positive quarterly results and indicated early strength in back-to-school sales.
The rebound was less pronounced in the major markets, which continued to hover around lows for the year owing to a second bump in interest rates and oil prices hitting record highs.
For the week, the S&P 500 remained essentially flat, closing Friday at 1,064.8, compared with last week’s closing of 1,063.97. It was a similar story for the Dow Jones Industrial Average, which rose 0.1 percent to close at 9,825.35 against a closing of 9,815.33 last week. The Nasdaq fell 1.1 percent to 1,757.22.
Ultimately taking the wind from the sails was the price of crude, which closed at a high of $46.58 a barrel on Friday.
Among retailers, Kmart Holding Corp. in particular had a busy week. On Tuesday, the discounter announced it was reducing the number of stores it would sell to Home Depot to no more than 19, for a sale price of approximately $288.5 million. Under terms of the original agreement, Kmart was to have sold up to 24 stores for approximately $365 million.
The company also announced plans to cut 200 jobs, or 10 percent of its workforce, at its company headquarters.
The following day, the company announced it would become a component of the Nasdaq-100 Index. Shares fell 3 percent to close at $64.90 a share from $66.93 a share last week.
Despite reporting a double-digit gain in earnings for the second quarter, teen retail giant Abercrombie & Fitch Co. took a beating after management lowered expectations and indicated comps at its core store would continue to languish. Shares fell 11.4 percent to $28.93 from $32.67.
Teen retailers American Eagle Outfitters Inc. and Urban Outfitters Inc. avoided Abercrombie’s fate, in large part to better denim offerings.
Investors fled Wet Seal Inc. after the company announced the resignation of creative director Victor Alfaro, who had been with the company less than a year and whose work was to be the basis of the company’s turnaround. Shares fell 22.4 percent to close at $1.90 from $2.45 last week.
This story first appeared in the August 16, 2004 issue of WWD. Subscribe Today.
— Ross Tucker
WWD Composite Stock Index vs. S&P 500